California's landmark deal to require a 25 percent cut in industrial greenhouse gases by 2020 is a largely symbolic victory with only a tiny impact on climate. But it's one that could prompt significant change in the nation's stance on global warming – and give the state a competitive edge in future years.
The agreement, which has not yet cleared the state legislature, would require industries – including oil refineries, chemical manufacturers, and utilities – to slash carbon-dioxide emissions.
Coming just two weeks after seven Northeast states officially approved a cap on CO2 emissions from electric utilities, California's far broader measure could presage a growing push among states to cut emissions.
Thus far, the Bush administration has resisted efforts to institute federal mandatory reductions on CO2 that might increase costs to business and harm the economy. Many California business groups also worry the measure will encourage businesses to locate elsewhere.
"We are very concerned that this bill will send the message to manufacturers in California and the rest of the world that it's going to be tougher to do business in California," says Dorothy Rothrock, vice president of government relations for the California Manufacturers and Technology Association. The mandate "goes way beyond measures that are cost effective," she adds.
California is the world's ninth-largest emitter of greenhouse gases. But even the major cuts it is proposing will have only a tiny effect because carbon emissions are growing so quickly, climate experts say.
"By itself it doesn't do much. It's main significance is in providing leadership," says Robert Dickinson, past president of the American Geophysical Union. "Even though this is just a little bit, a lot of little bits add up."
The US is the largest greenhouse gas emitter in the world, with 19 tons emitted per person per year, while California emits 12 tons per capita. If the US slashed per capita emissions to current California levels, the US would cut its output to 1.7 billion tons below the targets set by the international Kyoto agreement, state officials estimate.
The bill sets a cap on all of California's greenhouse gas emissions, and requires them to return to 1990 levels by 2020 – roughly a 25 percent cut compared to business as usual. The bill is not specific about how to achieve it, but it says regulators may adopt a trading scheme so that plants having trouble cutting emissions could buy emissions credits from plants that have made the cuts.
Despite some business concerns, others have gotten on board the energy efficiency train. Dow Chemical, which has four manufacturing sites in California, has slashed its energy use nationwide by 20 percent over the past decade. The company's new goal – a further 25 percent cut by 2015 – dovetails with California's effort.
"If we put together all the existing policies not yet fully implemented, that gets us a third of the way to meeting the new caps," says Jason Mark, California director of the Union of Concerned Scientists. "But new policies will be needed to get all the way there. That can include additional limits on other sources of emissions."
Despite the challenge getting to the goal, some experts say the push will make California more energy efficient, giving its industries an energy cost advantage and a leg up on their competition.
"In the long term, over the next decade, this is going to be a big plus for California's economy," says R. Neal Elliott, industrial program director at the American Council for Energy Efficient Economy in Washington. "Businesses in the state are going to be more competitive and less exposed to risk of volatile energy prices in the future."
While some worry the easy and inexpensive trims to CO2 emissions have been taken already, experts like Dr. Elliott say even California where much has already been done to trim energy use, there are still plenty of savings to be made. "In reality, we aren't anywhere close in any of these industries to tapping out our ability to save energy," he says. "It's really a situation of learning by doing, the more energy savings you look for, the more you find."
Cutting California's greenhouse emissions to 1990 levels by 2020 could boost the state's economy by $74 billion and create 88,000 new jobs, according to a new University of California at Berkeley study.
Some businesses have already made significant gains. DuPont, the big chemical company, has cut its greenhouse gas emissions by nearly 70 percent since 1990, saving about $2 billion. Similarly, IBM has saved nearly $800 million, thanks to its 65 percent cut in its emissions in the same period, the state's environmental protection agency reports.
Environmentalists cheered the deal, saying it would get the ball rolling nationally and bring other states on board.
"The big picture is that the rest of the world has been waiting around for years for the US to do something on global warming," says Bernadette Del Chiaro of Environment California, a nonprofit environmental group. "We have not seen any action on the national level and California is stepping up and joining the rest of the world in solving global warming."
• Begin reducing carbon-dioxide emissions in 2012, cutting them by 25 percent by 2020.
• Measure greenhouse-gas emissions of electric power plants, refineries, cement kilns, and other major emitters.
• Set limits for each facility.
• Create, if necessary, a trading system so that heavy emitters could buy credits from emissions-cutting companies rather than closing operations or moving out of state.